Penn State’s Protection Racket, 25: Precarious Position on IP

Posted on September 1, 2017 by Gerald Barnett

[I have made a few edits for style and clarity, and one update of a citation based on NIST’s renumbering.]

Had enough of Penn State? I sure have, but we are not done. Penn State is not an outlier in its problems with IP policy and otherwise. It’s just more of the same. At Penn State’s Office of Sponsored Programs web site, there is a statement titled “Penn State’s Position on Intellectual Property.”

Here is the sprightly opening line:

Penn State’s basic position regarding Intellectual Property (IP) is determined by the source of funding.

As we have seen working through Penn State’s IP policy, this assertion is simply untrue. Or, ignores IP policy. Or operates as an amendment to IP policy. Or creates an utter mess of an already utter mess. Would that be an utterer mess?

Penn State’s “basic position” as set out in IP policy is that (at best) the university requires disclosure of a wide range of IP. Otherwise (at worst), the position simply claims all IP based on use of resources and field of expertise or scope of employment. Absolutely nothing in either case has to do with source of funding. Even if the university’s IP position were based on source of funding, it would be something powful stupid. Source of funding is meaningless for IP. What matters is whatever legal obligations run with the funding. Continue reading →

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Penn State’s Protection Racket, 24: Fiduciary Duty

Posted on August 31, 2017 by Gerald Barnett

Penn State’s policy on conflict of interest, HR91, uses language that might be used to describe fiduciary duties. Penn State “faculty and staff members,” as a matter of policy, must use “utmost good faith” in their “duties to the University and its property.” By policy, faculty and staff “shall be held to a strict rule of honest and fair dealings between themselves and the University.” Further, “they shall not use their positions, or knowledge gained therefrom, in such a way that a conflict of interest might arise between the interest of the University and that of the individual.”

These assertions of policy put a great deal of pressure on what it means to have a conflict of interest. It would appear that “faculty and staff members” are reduced to that of the abstract “individual” that can have no personal interests but those that advance the interests of the University, writ large with a capital U.

All this is darkly odd. Typically, conflict of interest policies recognize that conflicts of interest do happen and the purpose of policy is to disclose those conflicts of interest that matter, and see that these conflicts are managed. Only in certain boundary cases are conflicts of interest not allowed–perhaps involving purchasing agents or senior executives involved in contracting, where even appearances might create problems. But here, conflicts of interest are simply forbidden.  Continue reading →

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Penn State’s Protection Racket, 23: Conflict of Interest

Posted on August 30, 2017 by Gerald Barnett

Penn State’s conflict of interest policy, HR91, discusses requirements on “faculty and staff members”:

In their dealings with and on behalf of the University, they shall be held to a strict rule of honest and fair dealings between themselves and the University.

In one way, this is a very strange “strict rule.” Stylistically, methinks it repeats itself:

in their dealings they shall be held to a strict rule of dealings

What makes this rule “strict”? Is it that policy elsewhere is “non-strict” but here it is “strict”? That would suggest must other bits of policy, unless they also declare themselves to be strict, are more like guidelines. And what is this about “honest” and “fair”? Why not also “utmost good faith,” if not also “candid” and “committed to the benefit of the University above personal interests”? What dealings are there that are dishonest or unfair that would otherwise be contemplated by the university? Is there an expectation that the university routinely gets into deals that are dishonest or unfair and by toosh the university won’t tolerate such deals from faculty and staff members?

Removing the passive voice we get something like this:

The University shall hold faculty and staff members to a strict rule of honest and fair dealings with and on behalf of the University.

Removing the “strict rule” nonsense we arrive at:

Faculty and staff members must be honest and fair in their dealings with and on behalf of the University.

But even this is strange. If the “dealings” rise to the level of contracts, then it would appear that the policy statement here contemplates faculty and staff acting as agents–dealings on behalf of the university–or doing business with the university–dealings with the university. That’s interesting enough, given that faculty don’t get delegated responsibilities for research contracting or IP licensing. If the dealings are contractual, then the contract establishes the mutual understandings and carries with it an implied duty of good faith. Continue reading →

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Penn State’s Protection Racket, 22: Agency

Posted on August 29, 2017 by Gerald Barnett

For all the talk about conflict of  interest in Penn State policies, Penn State does have a policy, HR91, that directly addresses conflict of interest. It’s odd that administrators can’t seem to focus their conflict of interest worries there and instead spread it all around in whatever policy of the moment happens to strike them. The statement of purpose in HR91 is straightforward, if unrealistic:

To avoid the possibility of any misunderstandings concerning the appropriate conduct of faculty and staff members in regard to all transactions touching upon their University duties and the property of the University.

It’s strange that a policy on conflict of interest can’t have as its purpose to identify conflicts of interest and manage or eliminate them. Instead, HR91 is worried about misunderstandings and appropriate conduct–as if the problem is confusion about actions (by anyone, even those given over to confusion about many things) or conflicting moral values, as if Socrates is just confused about Callicles, and gosh it would sure have helped if the both of them just had a university policy on the matter and didn’t have to try to reason things out using dialectic. Continue reading →

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Penn State’s Protection Racket, 21: Outside Activities

Posted on August 28, 2017 by Gerald Barnett

We are into Penn State’s policy on “Private Consulting Practice,” HR80. We arrive at, finally, a definition of “outside activity”–since one can be involved in outside consulting or merely go AWOL:

Outside consulting or other professional activity or service, paid or unpaid, that is beyond the scope of the individual’s University employment responsibilities.

We can re-write to eliminate the obtuse style:

Any professional activity beyond the scope of employment.

The only qualifier that remains is “professional.” We should reasonably interpret “scope of the individual’s University employment responsibilities” as those “reasonable” assigned duties referred to in the policy on academic freedom. What’s assigned is that for which one has been employed. But for faculty, it’s nuts that anything that’s not assigned is somehow properly regarded as “outside.”

There are then at least three meanings of “outside” at work. In one (here in HR80), “outside” means accepting payment from other than the university. In another, “outside” means anything beyond assigned duties. In a third, “outside” means something that isn’t obviously connected with one’s faculty activities, assigned or otherwise. Here, of course, the policy claims to control everything that isn’t subject to the university’s control as employment. That means, this is beyond a non-compete covenant–it purports to control even activities that cannot possibly compete. Continue reading →

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Penn State’s Protection Racket, 20: Consulting

Posted on August 25, 2017 by Gerald Barnett

Penn State’s policy on entrepreneurial activity, IP06, continues by reciting badly the university policy on consulting, at HR80. Yes, I suppose we have to look, having read the book. HR80 begins with an assertion about faculty duties:

A faculty member is expected to perform his or her University duties in the most effective manner of which he or she is capable.

It’s not clear who is doing the expecting here, but the expectation is utterly ambiguous: “most effective manner of which he or she is capable.” Short of some strange communist worker heroism, how could one possibly know what a faculty member is capable of, and what makes a given duty “effective”? What, for that matter, are “University duties”? We might think that, why, these are the reasonable duties that are assigned, per HR64:

The faculty member agrees, therefore, to abide by the regulations of the University, and to perform to the best of his/her ability such reasonable duties as are assigned by authorized University officials.

Reasonable, assigned duties–not anything a faculty member chooses to do. A faculty member might do any number of things that reflect professional activities, all tolerated if not encouraged by university administrators, that are not assigned duties. This distinction must be kept in mind whenever a policy brings up a claim, such as IP01’s use of “field of expertise”–the employment claim has to be restricted to those reasonable duties “as are assigned by authorized University officials.” Participating in research is, generally, not assigned and thus fails to come within the scope of any university claims to control resulting IP. There may be a sponsored research agreement that establishes control, but then the basis is policy actions that connect the sponsored research agreement terms with the participants in the sponsored project, not an assignment of duties by university officials.

HR80’s opening statement, however, also contains a loyalty demand: Continue reading →

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Penn State’s Protection Racket, 19: Conflict of Commitment

Posted on August 24, 2017 by Gerald Barnett

Even with this critique we have not got to the bottom of Penn State’s policy treatment of conflict of interest/commitment as a covert IP policy. Conflicts of interest and/or commitment “exist” when someone has “preferential access” to knowledge or university resources “for personal gain.” This is getting very silly. What knowledge? Whose knowledge? Who gives preference? If anyone can walk into a research laboratory, is preferential access to that lab impossible? If a faculty member uses a database subscribed to by the university’s library “for university use only,” to write a textbook, is it a conflict of interest that the publication of the textbook might result in personal gain? Are we far enough along this line of reasoning that any use of the university’s “resources” for “personal gain” is verboten?

The University of Washington administration has already gone that route–arguing that any sort of research might increase a person’s knowledge and that in turn is a personal gain that’s not allowed unless the knowledge (“know how”) is owned by the university and any personal gain comes as a share of whatever university administrators can make from selling the knowledge behind a licensing paywall. Thus, any research using university resources creates a private gain that must be managed or the gaining person is corrupt and can be taken down, reputation destroyed, career destroyed–all for thinking to benefit from improving oneself through research. See the history of the University of Washington’s approval process for personal consulting. Have a paper bag on your knee.

But this is all reasoning based on an understanding of text. With university policy, such reasoning is to be displaced by administrative assertions taken as formal truths in whatever form university administrators may utter them. Continue reading →

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Penn State’s Protection Racket, 18: University Interests

Posted on August 23, 2017 by Gerald Barnett

Penn State’s policy on entrepreneurial activities opens with this claim:

Technology transfer must be effected within the framework of an individual’s obligations to the University.

Given what we have learned about Penn State’s policies on academic freedom, we might revise the opening argument of IP06 to provide a sense of what is in play. Consider, instead, this opening:

Technology transfer must be effected within the framework of the university’s obligations to its faculty, students, and community.

That is, technology transfer works within what the university has already committed to; technology transfer does not provide a justification to suspend all privileges granted by the university so that administrators can take personal property (inventions, works of authorship) that they hope to sell off. To cover their crappy management, they cannot tolerate anyone else selling that property off or worse, giving it away, so they write a policy to forbid alternatives and beat down objections. Continue reading →

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Penn State’s Protection Racket, 17: Academic Freedom

Posted on August 22, 2017 by Gerald Barnett

Here’s the opening of Penn State’s policy on academic freedom (HR 64):

Academic freedom refers to the environment provided by the University that permits faculty members to engage in their scholarly pursuits of teaching, research, and related activities at institutions of higher education.

This, then, is the “framework” that matters. The university provides an environment for faculty to do their work–including research and “related activities.”

Academic freedom thus embodies the conditions necessary for the University to fulfill its mission of creating new knowledge and of effectively communicating accumulated knowledge and understanding to students and to the community at large.

The university fulfills its mission when it provides academic freedom to its faculty. The university’s mission is fulfilled by faculty pursuing their teaching, research, and related activities.

With academic freedom comes “academic responsibility”:

Academic responsibility refers to the duty and obligation of all faculty to pursue their academic pursuits with forthrightness, recognizing that while all members of the University have the right to express their own views and to hear the views of others expressed, as well as the responsibility for according the same rights to others, they also have a duty to make it clear when they are not speaking for the institution in matters of public interest.

That is, the duty faculty have to the university is to pursue their work “with forthrightness.” Continue reading →

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Penn State’s Protection Racket, 16: Entrepreneurial Activity

Posted on August 21, 2017 by Gerald Barnett

We worked through Penn State IP policies past (1940, 1991) and current, looked as well at the weirdness that is the IP Agreement (from 1992 and current), and discovered that for all that apparatus–poorly conceived and drafted–the only formal requirements are that inventors disclose an ambiguously broad set of things they make and that they sign an IP Agreement that purports to assign all these things to the university outright, before they are made, except only “to the extent specified” by policy, and that is, exactly nothing because policy does not specify anything to be assigned.

The IP Agreement turns a policy requirement into a private contract and, as an adhesion contract, favors the non-drafting party in any ambiguities. Where there are ambiguities, it is what an inventor reasonably determines that she or he has agreed to that makes a “meeting of the minds” that in turn makes an agreement “legally binding.” That’s where the Shaw court went, at least.

If all the IP Agreement does is claim that each potential inventor has agreed to whatever administrators say they have agreed to, then the IP Agreement is not a contract. If the IP Agreement claims that potential inventors have agreed to whatever the university subsequently puts in policy (or procedures), again, that’s an agreement to agree and not generally enforceable (though the Fenn court decided otherwise). For all that, university policy already provides that faculty will follow “university regulations.” So what does an IP Agreement (thus drafted) do beyond what’s already in policy? Nothing but add ambiguity and limit the university’s ability to manage policy as a means of distributing administrative responsibilities. Continue reading →

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